Emerging Strategic Metal & Coal

Producer

Fortune Minerals Limited Investor Presentation TSX-FT, OTC QX-FTMDF

August 2012

Forward-Looking Information

This document contains certain forward‐looking information. This forward‐looking information includes, or may be based upon,estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the size and quality of theCompany’s mineral resources progress in development of mineral properties timing and cost for placing the Company’s mineralCompany s mineral resources, progress in development of mineral properties, timing and cost for placing the Company s mineralprojects into production, costs of production, amount and quality of metal products recoverable from the Company’s mineralresources, demand and market outlook for metals and coal and future metal and coal prices. Forward‐looking information is based onthe opinions and estimates of management at the date the information is given, and is subject to a variety of risks and uncertaintiesand other factors that could cause actual events or results to differ materially from those projected in the forward‐looking information.These factors include the inherent risks involved in the exploration and development of mineral properties, uncertainties with respectf p p f p p , pto the receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting drilling results andother geological data, fluctuating metal and coal prices, the possibility of project cost overruns or unanticipated costs and expenses,uncertainties relating to the availability and costs of financing needed in the future, uncertainties related to metal recoveries and otherfactors. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources areconsidered too speculative geologically to have economic considerations applied to them that would enable them to be categorized asmineral reserves. There is no certainty that mineral resources will be converted into mineral reserves. Readers are cautioned to notplace undue reliance on forward‐looking information because it is possible that predictions, forecasts, projections and other forms offorward‐looking information will not be achieved by the Company. The forward‐looking information contained herein is made as ofthe date hereof and the Company assumes no responsibility to update them or revise it to reflect new events or circumstances, exceptas required by law.

1

Financial SummaryCorporate Information Share Performance

Listings: TSX (Canada): FT

OTC QX (USA): FTMDF 1,200

1,400

$1.40

$1.60Daily Volume

OTC  QX (USA):   FTMDF

Share Price  $0.57

Shares Out – Basic 117.1

Shares Out – Fully Diluted 123.6 600

800

1,000

$0 60

$0.80

$1.00

$1.20

g V

olum

e (M

)

e Pr

ice

(C$)

Closing Price

Market Cap – Basic $66.7

Working Capital (Q2 2012) $20.6

Total Assets (Q2 2012) $155.2All amounts in M or CAD$M except per share amounts. -

200

400

$0.00

$0.20

$0.40

$0.60

Tra

din

Shar

eOwnershipAnalyst Coverage

Dealer Date Rating Target

D id D id

Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12

David DavidsonParadigm Capital

July 15, 2011 Buy $2.85

Killian CharlesIndustrial Alliance Securities

Jan 31, 2012 Spec Buy $3.30

Michael FowlerLoewen Ondaatje McCutcheon

July 3, 2012 Spec Buy $2.65

China Mining Resources Group Ltd. 13%

Manulife Asset Management 9%*

Insiders 21%

2

Loewen Ondaatje McCutcheon

As of August 3, 2012*PrecisionIR data at July 16, 2012

Fortune Minerals Limited

Fortune Minerals Limited

Canadian mineral development company

H d t d i L d O t i C dHeadquartered in London, Ontario, Canada 

Canada Focus ‐ operating in mining friendly jurisdictions

Two late‐stage projects

NICO Gold‐Cobalt‐Bismuth‐Copper Project, Northwest Territories:

Positive Definitive Feasibility Study & FEED Study

Near completion of Environmental Assessment & Permitting ProcessAssessment & Permitting Process 

Arctos Anthracite Project, BC (formerly Mount Klappan Anthracite Coal Project):

Positive Definitive Feasibility Study

d i d d i

3

Advancing towards production

Anthracite: Highest Quality Coal

Arctos is the largest & most advanced Canadian project of high rank anthracite coalHighest quality metallurgical coal with very high carbon & energy content

Represents only 1% of world coal reserves p y

Metallurgical coal with diverse applicationsMetallurgical Reductants / charge carbon ($US300/t)

Ultra Low Vol PCI (US$175 200/t)Ultra‐Low Vol. PCI (US$175‐200/t)

Sinter (US$150‐175/t)

Other products: 

Filter media (US$1000/t)

Blend coal with coking coal for making metallurgical coke

Direct coke replacement

Urea fertilizers, synthetic fuels & plastics

H ti & ki b i ttHeating & cooking briquettes

Pelletizing

Premium thermal coal

4

Significant Future Met Coal Demand Growth

>500 million mt demand 1,600 

Global Met Coal DemandInsufficient supply of metallurgical coals to meet forecast global demand

I i d d f th it increase over the next decade with limited new production potential

1,185 

1,440 

1,200 

1,400 

Increasing demand for anthracite due to new steel technologies –lower emissions

Emerging economies are driving forces for future metallurgical coal demand

920 

800 

1,000 

Mt

demand

Steel production in India, Brazil, China, & Vietnam growing rapidly

400 

600 

‐

200 

2010 2015 2020

5

Source: Peabody Global Energy Analytics, Deloitte

Growing PCI & Sinter Demand

Use of Pulverized Coal Injection (PCI) reduces the amount of coke required in steel production

Steelmakers around the world are expanding PCI t d tuse to reduce costs

Low‐vol PCI typically priced at 70% to 80% of high quality hard coking coal

Arctos PCI will achieve a higher price given its ultra‐l l illow volatile content

Arctos coal also has diverse usage in sinter products (high purity)

6

Source: Macarthur Coal

Emergence of China as Net Coal Importer

China became a net coal importer of anthracite in 2004, coking coal in 2007, all coals in 2009

Coal & Anthracite Net Imports by China

$300

$215

$291

$250

$300

$350

250.0

300.0

350.0

Coal Net Imports (Mt)

Anthracite Net Imports (Mt)

Met Coal Price (US$/t)

$125$115

$98

$129

$100

$150

$200

100 0

150.0

200.0

S$/t

Mt

$47 $45$58

$0

$50

$100

0.0

50.0

100.0

USM

‐$150

‐$100

‐$50

‐150.0

‐100.0

‐50.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

7

Source: China Coal Resource Website, Bloomberg

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Decreasing Supply of Anthracite

Supply constraints due to declining exports and lack of new supply China: 483 million tonnes – net importer since 2004

Vietnam: 43 million tonnes – reduced exports to utilize production domesticallyp p y

Few new high‐quality deposits in mining friendly jurisdictions

500

Supply of Anthracite ‐ 2009

300

350

400

450

Production

Export

100

150

200

250Mt

Export/Production 55.8% 1.2% 58.4% 32.2%

0

50

Vietnam China Russia Others

8

Source: Marubeni, EIA, Deloitte

Introduction to Arctos Anthracite Project (formerly the Mount Klappan Anthracite Metallurgical Coal Project)

Summary Highlights

One of the world’s premier metallurgical coal development projects

Ad d j i h $90 illi f k l dAdvanced project with over $90 million of work completed

Definitive Feasibility Study with robust economics, update in progress

Railway development strategy to Port of Prince Rupert – allows for scalable expansion

ld l d i h S h OSCO f h ld’ l l dWorld‐class JV partner secured with South Korean POSCO – one of the world’s largest steel producers

Supply shortages of metallurgical coals with growing world consumption

Accelerated development strategy with funding to construction in place

9

Strategic Location & InfrastructureLarge license area in northwest BC (16,411 Ha)

Close proximity to deep water shipping ports

Stewart Port (150 km)

Ridley Terminals in Prince Rupert (330 km) 

Mine site straddles railway right‐of‐way

Track (CN) installed to 150 km south of mine

l d b d l l lRailway road bed largely complete to mine

Road access from railway subgrade

Support from CN Rail for railway expansion

BC Government extending electrical grid to areag g

Project in Tahltan, Gitxsan & Skii km Lax Ha Territories

BC Government sharing revenues with Aboriginal groups

1010

Railway sub‐grade links mine site with CN mainline & Ridley Terminals

Joint Venture with POSCO

Secured world‐class investor & strategic partner – world’s 3rd largest steel producer by crude steelPOSCO Canada has acquired 20% interest in Arctos for anticipated total payments & cash contributions of $181 million based on current capital cost estimates 

$30 million paid to Fortune, $20 million contributed directly to the JV

20% of total development & capital costs – $154 million under current estimates

20% of operating costs for 20% of production in‐kind for their own use

Fortune is Project Manager & is compensated for providing support over life of mineFortune is Project Manager & is compensated for providing support over life of mine

Validates Arctos as one of world’s premier metallurgical coal development projects ‐ key future supplier to global steel industry

Accelerates project development – funding to construction now in place

1111

POSCO steel plant

Resources & ReservesSignificant potential to upgrade & increase resources & new reserves (expected Q3 2012)

Lost Fox deposit remains open for possible expansion & additional coal seams identified below 300 meters & on adjacent lands

Arctos Resources (million tonnes) 

Area Measured Indicated M&I Inferred

Historical resources include 2.2 billion tonnes in the Speculative class*

Lost Fox 107.9 109.5 217.4 91.5

Hobbit‐Broatch 13.5 13.5 258.4

Summit 9.6

Lost Fox Extension

Lost Fox Metallurgical Coal Reserves (million tonnes)

Total 107.9 123 230.9 359.5

Run‐of‐Mine Coal Reserves 10% Ash Product Reserves

The Arctos Mineral Resource & Mineral reserve estimates were prepared in 2002, 2005, & 2007, respectively, by Marston & Marston Inc. in compliance with NI 43‐101. Richard Marston, P.E. is the Qualified Person responsible for the estimates. *In addition to the Measured, Indicated & Inferred resources in the table, historical resources include 2.2 billion tonnes in the Speculative class. However, Speculative resources are not current & 

Measured Indicated Total In Situ Proven Probable Total Product

89.5 16.8 106.3 51.6 9.2 60.8

1212

, , p , pshould not be relied upon.

Railway Partially ConstructedRailway transportation allows for scalable expansion of production to take advantage of large resource base

CN Rail operates between Prince George & Port of Prince Rupert & on Dease Lake Line to Minaret, 150 km south of Mount Klappan

New rail line runs through Tahltan, Gitxsan & Skii km Lax Ha traditional territories

Railway road bed largely constructed to mine site – brownfield extension from Minaret

Survey & engineering of railway extension – $317.8 million capital cost included in 2010 DFS

CN collaborating on railway upgrade & extension to ArctosCN collaborating on railway upgrade & extension to Arctos

Existing railway right‐of‐way & road bed

13

Rail Update – Moving ForwardCanadian & BC Government engaged at very high levels

Premier, Ministers & senior staff in BC government

COO of Transportation & Executive VP level at CN

Currently entering into an Memorandum of Understanding with CN outlining the relationship & roles

Negotiating optimal land tenure arrangement with the BC Government 

Likely public infrastructure under lease to CN with JV paying for upgrade & extension

d d f h d f lAdvancing discussions for third party financial support

Government recognizes they will either contribute financially or Fortune to get repaid from future third party users

Consultants engaged to advance work

Stantec & DPRA engaged for environmental work & aboriginal engagement

Fleishman‐Hillard retained for government engagement

Engineering company to be selected to prepare detailed rail engineering study 

1414

Port with Capesize Capacity

Ridley Coal Terminal a world‐class coal & bulk materials handling facilityIce‐free, deep water port 36 hours closer to Asia than Port of Vancouver

Capable of handling full Capesize vessels that reduces ocean freightp g p g

Currently handling ~70% of 16 Mtpa design capacity

Expansion to 24 Mtpa in progress – potential to expand to 50 Mtpa

Opportunities for shared cargos & blending of coals with other metallurgical coal producers

15

Positive Definitive Feasibility StudyNovember 2010 update to 2005 & 2008 DFS

Based on railway transport of coal to Ridley Coal Terminal in Prince Rupert

Initial 3 Mtpa production from Lost Fox deposit open pit mine, wash plant & site infrastructure 

60.8 Mt of product coal reserves – 20+ years production (only 3.6% of global resource)

Premium ultra‐low volatile PCI product

Can diversify product mix to produce premium products (charge carbon) & sinter

f f d ( ) l h $ / ( $ / )

BASE CASE

Life of mine average Free On Board (FOB) vessel cash cost US$104.79/tonne (C$110.30/tonne)

$3 3

$3.8 $4.0 NPV ‐ Pre‐tax at 8%

Ultra‐Low Volatile PCIUS$175 / tonne (C$1 = US$0.95)

PRE‐TAX AFTER TAX

IRR 25.4% 20.7% $1.6 

$2.2 

$2.7 

$3.3 

$1 5

$2.0 

$2.5 

$3.0 

$3.5 

C$B

NPV (8%) C$1,027.8 Million C$667.4 Million

Capital (Years 1‐4) C$768.4 Million(includes railway capital)

$0.5 

$1.0 

$‐

$0.5 

$1.0 

$1.5 

$150/t $175/t $200/t $225/t $250t $275/t $300/tThe 2010 Feasibility Study was prepared by Marston & Marston Inc. in compliance with NI 43-101 Ted Minnes P E is the Qualified Person responsible for the study

1616

NI 43 101. Ted Minnes, P.E. is the Qualified Person responsible for the study.

Permitting Update – Work UnderwayProject Description Report nearing completion & submission

Initial draft under review with requirements for input from Fortune & technical leads

Document will be forwarded to Aboriginal groups & EA agencies in draft for review

Anticipated filing of document in Q3 2012Anticipated filing of document in Q3 2012 

Gaps Analysis & Work Plan completed

Provided to Aboriginal groups for review & input

Proposed winter work for wildlife & snow surveys 

Baseline Field Work

Additional field work for mine area & road access corridorAdditional field work for mine area & road access corridor

Full year of work required along the railway corridor

Anticipate field work to start in 2012, report by Fall 2013

Environmental Impact Statement/BCEAA Application

Work on this document will commence in the Fall of 2012 using existing information 

Anticipated completion by Fall 2013 after baseline reports completed

Document will be forwarded to Aboriginal groups in draft for review

17

Document will be forwarded to Aboriginal groups in draft for review

Aboriginal Update Tahltan Nation 

Agreements to Date

Environmental Assessment Process 

Gitxsan Nation 

Proposed new railway passes through 5 Gitxsan house territories 

d f d d &Funding

Traditional Knowledge Agreement

Confidentiality Agreement – PEM Data Sharing Agreement

Memorandum of Understanding & Territory Access Permissions under negotiation

Quarterly meetings with chiefs of the subject watersheds

Annual presentations at Gitxsan SummitNegotiating communication protocols

Long history of bilateral discussions and meetings

Annual presentations at Gitxsan Summit

Gitxsan Community Liaison employee

Traditional Use & Knowledge Study to be completed in cooperation with hereditary chiefs 

1818

Government Update – OverviewWhat’s new:

A re‐energized approach to mine development

Government focused on Premier Clark’s BC Jobs Plan

Premier’s commitment:

Eight new mines in operation by 2015

Nine existing mine expansions by 2015

Key initiatives:

Expedited permitting process

Establishment of the Major Investments Office

Investment in trade infrastructure, i.e., ports, , p

Pacific Gateway Policy

1919

Significant Upside Potential

One of world’s largest undeveloped deposits – railway transportation solution provides scalable expansion potential

Rail transportation allows for higher annual production than 3 Mtpa

DFS reserves only represents 3.6% of total resource – New reserves in preparation

Updated reserves in preparation for Lost Fox deposit that can support higher production rates.

Production can be expanded from adjacent Hobbit – Broatch deposit

Current resource only identified to 300 meters – Additional coal seams identified at depthCurrent resource only identified to 300 meters – Additional coal seams identified at depth

Budget in place for additional drilling

3rd Party contribution to railway capital costs increases NPV

BC Government extending electrical grid & connection would lower power costs & enables use of lower cost i i i tmining equipment 

Lease‐to‐purchase of mobile equipment fleet lowers upfront capital costs & increases IRR

2020

Accelerated Development StrategyJV partner now secured & accelerated development program underway

Next steps include:

Update reserve estimate

Continue Tahltan, Gitxsan, Skii km Lax Ha & stakeholder engagement 

Environmental, socio‐cultural & economic studies underway in support of permitting process

Project Description to be submitted to Aboriginal groups, BC EAO & CEA agency

l h l &Complete the environmental assessment & permitting processes

Complete updated Definitive Feasibility Study 

Complete engineering on railway transportation with CN Rail and negotiate MOU

Conduct additional expansion drillingp g

Second stage strategic partner(s) and project financing

• Deloitte is engaged to advise on project financing & development options, targeting a project level joint venture, potentially including:

Mi it it i t t• Minority equity investment

• Off‐take relationship

• Commitment to arrange debt financing for construction

2121

Targeted Milestones

2012 2013 2014 2015 2016

Proposed Development Timeline

2012 2013 2014 2015 2016

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Project Description submission

Baseline field workBaseline field work and document prep

Filing of EIS‐EAC documents

EAO‐CEAA review processprocess

Ministerial decision process

Mine          permitting

Construction & commissioning

Commercial production

22

NICO Project Highlights

Positive Front End Engineering & Design Study (FEED) completed based on a vertically integrated mine & mill in the Northwest Territories & refinery in Saskatchewan

Robust economics – generates NPV of $309 million* – highly leveraged to increased cobalt & gold prices with low downside risk

Negative cash cost – cobalt cash cost (net of credits) of negativeUS$0.81/lb at Base Case prices & negative US$1.07/lb at Current Prices

High‐grade deposit of combined gold, cobalt, and bismuth co‐products plus by‐product copper

Positioned to be one of the largest & lowest cost suppliers of cobalt sulphate to the rapidly expanding battery sector 

Very advanced project with $100 million already invested –including pilot plants test mining and extensive permitting workincluding pilot plants, test mining and extensive permitting work – resulting in planned production in 2015

Strong management & board with experience in mine permitting, development & operations 

23

Test mining 2006/2007

*Base case: pre‐tax, 7% discount rate

Cobalt: Robust & Diverse MarketWide Application of Industrial UsageWide chemical and metallurgical market 

applications in batteries, high strength alloys, cutting tools, catalysts, etc.

Cobalt sulphate is used in lithium ion & nickel metal hydride batteries for electronic devices & hybrid/electric vehicles

High purity cobalt is used in aerospace 

27%

7%

6%

5%4% Batteries (27%)

Superalloy (19%)

Hard Materials (13%)

Colours (10%)

Catalysts (9%)applications

Cobalt demand expected to grow at ~7% per year in the next five years

Over the past decade increase in demand

19%

13%

10%

9%Catalysts (9%)

Magnets (7%)

Hardfacing & Other Alloys (6%)

Tyre Adhesives, Soaps, Driers (5%)

Feedstuffs (4%)

Source: CRU, Cobalt Development Institute

Over the past decade, increase in demand resulted almost exclusively from increase in chemical applications, most notably rechargeable batteries and catalysts

Chemical applications accounted for ~55% ofChemical applications accounted for  55% of worldwide cobalt demand in 2011 & are expected to dominate future cobalt consumption

24

Cobalt: Rechargeable Batteries Drive Demand

Cobalt is critical for manufacturing batteries used in electric vehicles*, computers, cell phones & other electronic devices

Nickel metal hydride car batteries contain approximately 3 to 5 lbs of cobalt

Lithium‐ion car batteries contain 5 to 7 lbs of cobalt

Cobalt usage in batteries is expected to grow from 25% of demand in 2011 to 45% in 2018

5

6

s

Global Electric Vehicle Battery Sales

d l

3

4

Millions of U

nits Approx. 20% compound annual 

growth forecast from 2011 to 2020

0

1

2

25

* Electric vehicles include hybrid electric vehicles (HEV), plug‐in hybrid electric vehicles (PHEV) & pure electric vehicles (EV)Source: Roskill

2008 2010f 2012f 2014f 2016f 2018f 2020f

Cobalt: Shortage of Reliable SupplyVast majority of cobalt  sourced from regions that are  politically unstable or prone to export restrictions 

Congo (DRC) currently accounts for 51% of global supply   

China has the largest refining capacity (43% in 2010) but limited mine supply

Chemical production is in deficit by about 14,000 t in 2011

LME initiated futures market trading for cobalt in 2010, resulting in a more liquid market

NICO will be a reliable North American producer

51%50%

60%Proportion of World Cobalt Production (%)

20%

30%

40%

12%

7% 7% 5% 5% 4% 3% 2% 2% 2%

0%

10%

20%

Congo Zambia China Russia Other Countries

Australia Cuba Canada New Caledonia

Brazil Morocco

26

Countries Caledonia

Source: USGS Industry Survey 

Gold: Counter Cyclical Hedge

Gold price increased consistently in past 9 years, especially after recent economic downturn$2,000

Historical & Forecast Gold Price

While mine supply remains relatively flat, future demand continues to grow:

Growing physical demand from Asia & central banks

$1,574

$1,749

$1,400

$1,600

$1,800

Growing investment demand based on currency protection & safe haven status

Provides a flexible financing opportunity$697

$873 $873

$1,211

$800

$1,000

$1,200

NICO contains 1.1 million ounces of gold

– provides a significant counter‐cyclical hedge$310

$363$410 $445

$604$

$200

$400

$600

$0

$

27

Source: Bloomberg; Energy & Metals Consensus Forecasts April 2012 

Bismuth: Environmentally FriendlyTraditionally used in fusible alloys, cosmetics, chemicals etc.

New markets focus on super conductors, CDs & auto anti‐corrosion materials

Environmentally safe replacement for lead in plumbing & electronic solders, brass, ceramic glazes, free cutting steel, hot dip galvanizing & paint pigments

Global framework to eliminate lead expected to drive increased bismuth consumption 

European legislation to eliminate lead in electronics

Growing Number of Applications

Alloys, solders and others, 8%

Chemicals & pharmaceuticals 65%

others, 8%

pharmaceuticals, 65%Metallurgical additives, 27%

28

Source: USGS Industry Survey 

Bismuth: Limited SupplyWorld market between 15,000 & 20,000 t per year

China is the principal source of bismuth (240 Kt reserve), accounting for 80% of world reserves & 73% of world production in 2010

W ld Bi th R

China has closed 20% of its production due to environmental concerns & China’s exports could halve in 2012 due to export restrictions (only 1,242 t in the first four months) 

NICO contains over 48 Kt of bismuth, equivalent to 15% of world reserves & the world’s largest deposit

240,000 250,000 

300,000 World Bismuth Reserves

100 000

150,000 

200,000 

Tonn

es NICO is the world’s largest deposit of 

bismuth

11,000  10,000  10,000  5,000  5,000 

39,000 48,661 

‐

50,000 

100,000 

*

29

China Peru Bolivia Mexico Canada Kazakhstan Other Countries NICO

*Excluding NICOSource: USGS Industry Survey 2010 

*

Introduction to NICO Project & SMPP

NICO Project

Large scale cobalt‐gold‐bismuth deposit

k f f ll k f160 km from City of Yellowknife

450 km from railway at Hay River 

High concentration ratio using simple flotation – 4,650 t of ore / day reduced toflotation  4,650 t of ore / day reduced to 180 t of concentrate

Allows shipping to Saskatchewan

Saskatchewan Metals Processing Plant  (SMPP)

Hydrometallurgical plant to process bulk concentrate from NICOconcentrate from NICO

Plant will produce gold doré, cobalt sulphate &/or cobalt cathode, bismuth ingot & copper metal precipitate

30

Mine Location & Infrastructure

5,140 Ha lease in southern NWT

Winter access roads

All h d l d bAll‐weather road planned by governments to highway (135 km)

$18 million in place for stage 1 –realignment, bridges & roadbed

Engineering & environmental workEngineering & environmental work underway  

450 km from railway at Hay River for transport of concentrates to SMPP

160 km from City of Yellowknifey

50 km from Town of Whati

22 km from Snare Hydro 

Settled land claims with Tlicho Government

31

Saskatchewan Metals Processing Plant

Hydrometallurgical plant to process bulk concentrate from NICO mine & mill to produce gold doré, cobalt sulphate or cathode bismuth ingot & copper metalcathode, bismuth ingot & copper metal

High concentration ratio of ore using simple flotation allows concentrate to be shipped to Saskatchewan for lower cost processing

4,650 t of ore /day reduced to only 180 t of concentrate 

Significant advantages to Saskatoon site:

Located on CN Rail lineLocated on CN Rail line

Close to Trans Canada Hwy

Inexpensive power (5.7 cents / kWh)

Close to natural gas & reagent sourcesClose to natural gas & reagent sources

Skilled worker / engineer pool 

5 year tax holiday

32

NICO Mineral Reserves

Underground Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)

Proven 282,000 4.93 0.14 0.27 0.03

P b bl 94 000 6 0 11 0 19 0 01Probable 94,000 5.6 0.11 0.19 0.01

Total 376,000 5.09 0.13 0.25 0.02

Open Pit Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)

Proven 20,513,000 0.94 0.11 0.15 0.04

Probable 12,099,000 1.05 0.11 0.13 0.04

Total 32,612,000 0.98 0.11 0.14 0.04

Combined Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)

Proven 20,795,000 0.99 0.11 0.15 0.04

Probable 12 193 000 1 09 0 11 0 13 0 04

N S f h bi d i l l l f h d d d i d di

Probable 12,193,000 1.09 0.11 0.13 0.04

Total 32,988,000 1.02 0.11 0.14 0.04

Contained Metal1,085,000ounces

82,268,000 pounds

102,053,000 pounds

27,179,000 pounds

33

Note: Sums of the combined mineral reserves may not exactly equal  sums of the underground and open pit reserves due to rounding error.

Reserve estimate by P&E Mining Consultants Inc., Eugene Puritch, P.Eng. & Fred Brown, CPG PrSciNat, Qualified Persons as defined by NI‐43‐101

Well-Understood Geology

The NICO mineral reserves are based on 327 drill holes & surface trenchesDeposit is an Iron Oxide Copper‐Gold (“IOGG”) class deposit, commonly referred to as Olympic Dam‐type after the dominant “Super Giant” deposit in South Australia

Ore is hosted in three lenses of brecciated ironstone up to 1.3 km in length, 550 m in width, & 70 m in thickness

Green = Upper Ore Zone, Blue = Middle Ore Zone, Red = Lower Ore Zone

34

Brown = Open Pit, Cyan = Underground Development and Stopes

Underground Test Mining Complete

Mining conditions, geometry & grades confirmed

E i l i dEnvironmental impacts assessed

Portal, 2 km of decline ramp & 2 mine levels established with ventilation raise to surface 

~$20 million pre‐production development completed

Large sample collected for pilot plant testingp g

35

Extensive Metallurgy Work

1997‐2012 Metallurgical expenditures ~$12 MLab & bench scale test work 

2007 200 t bulk sample pilot plant study2007 200 t bulk sample pilot plant studyProved process flow sheetEstablished baseline process   performance & productsImproved recoveries over feasibility studyp y yProvided samples for environmental testsProved co‐disposal of tails with waste rock 

2010‐2012 30 t pilot studyVerified higher gold recoveries from regrind ofVerified higher gold recoveries from regrind of cleaner float tailsProved blending of bismuth residue with cobalt autoclave feedEliminated 1 of 2 gold circuits at SMPPgHigher gold recovery & reduced risk Higher cobalt recoveryVerified cobalt sulphate process

2008‐2012 FEED report & detailed engineering

36

2008 2012 FEED report & detailed engineering

Positive Pilot Plant Results

Continuous flotation tests to produce  separate cobalt & bismuth concentrates

Recovery improvements to Co, Bi, Au & Cu

Proved process flow sheet production of high value products & improved metal recoveriesProved process flow sheet, production of high value products & improved metal recoveries

Cobalt pressure oxidation, precipitation & electrowinning to demonstrate production of 99.8% cobalt cathode

Bismuth ferric chloride leaching, production of 99.5% bismuth cathode as powder ‐ Flux & smelt to >99.9% bismuth ingot

Ability to produce thickened tailings from bulk tailings       

Cobalt Cathode Metal

Co >99.95%

Cobalt Carbonate

Co 50.6%

Bismuth Ingot

Bi >99.99%Cobalt Sulphate

(heptahydrate)

Co 20 9%

37

Co  20.9%

2012 FEED Study

FEED Study Highlights – Base Case, Cobalt Sulphate

Mine typeOpen pit with underground in 2nd year to 

hi h d t i l

Positive FEED Study demonstrating very low costs & strong economics

Vertically integrated project consisting of ypaccess high grade material

Mining methodOpen pit: conventional truck & loaderUnderground: blasthole open stoping

Strip Ratio Waste to ore 3 0 : 1

Vertically integrated project consisting of an open pit & underground mine, mill & hydrometallurgical refinery 

Negative cash cost net of credits & very low capital costs of $441 million Strip Ratio Waste to ore  3.0 : 1

Processing rate 4,650 tonnes of ore/day

Mine life 19.8 years (potential for additional 3.2)

low capital costs of $441 million

Includes a significant amount of detailed engineering, reducing project risk

Golden Giant Mine (Hemlo) equipment  h d & d l d f l

ProcessingProcessed to high value metal products at SMPP

Pre‐tax NPV (7%) $308.5 million

P t IRR 14 0%

purchased & dismantled for relocation to NICO

Metal recoveries verified from pilot plants; 

Gold recovery ranges from 56 to 85%, Pre‐tax IRR 14.0%

Capital costs $440.5 million

Cobalt operating cost (net of credits)

Negative US$0.81/lb at Base CaseNegative US$1 07/lb at Current Price Case

with an average of 73.7%

Cobalt recovery of 84%

Bismuth recovery of 72%

Copper recovery of 41%

38

cost (net of credits) Negative US$1.07/lb at Current Price CaseCopper recovery of 41%

Balanced Production Scenario

NICO will be a reliable Canadian‐based producer of strategic metals:

Gold doré, 99.8% cobalt cathode &/or 20.9% cobalt sulphate, 99.99% bismuth ingot, & a copper metal precipitate

$85M 

$80 

$90 Average Annual Revenue by Metal – Base Case

$59M 

$41M 

$50 

$60 

$70 

US$M

$20 

$30 

$40 

$2M 

$‐

$10 

Cobalt Sulphate Gold Bismuth Copper

Annual Production 3 473 586 lbs 40 500 oz 3 681 824 lbs 559 397 lbs

39

Annual Production 3,473,586 lbs 40,500 oz 3,681,824 lbs 559,397 lbs

Negative Cash Costs

NICO has negative operating costs for all metals net of by‐product credits

Demonstrates that after capital has been repaid, operations can be sustained during periods of low metal prices & volatility

$0.00Base Case Current Price

b)

Cobalt

$0Base Case Current Price

b)

Bismuth

$0Base Case Current Price

z)

Gold

‐$0.40

‐$0.20

y‐Prod

ucts ($

US/lb

‐$6

‐$4

‐$2

By‐Produ

cts ($US/lb

‐$148.42

‐$300

‐$200

‐$100

y‐Prod

ucts ($

US/oz

‐$0.81‐$0.80

‐$0.60

Cash Cost N

et of B

y

‐$7.99

‐$10

‐$8

‐$6

Cash Cost N

et of B

‐$600

‐$500

‐$400

Cash Cost N

et of B

y

‐$1.07‐$1.20

‐$1.00

‐$12.78‐$14

‐$12

‐$738.75‐$800

‐$700

40

Note: based on cobalt sulphate option.

Low Capital Costs

Capital costs total $441 million for the first 2 years of the project, including all direct & indirect costs & contingencies

$400

$450

$500

Summary of Capital Costs

SMPP Site Capital Costs

230

$250

$300

$350

$400

sts (C$M

)

Refinery

Rail load out

Ponds

210$100

$150

$200

$250

Capital Co

NICO Site Capital Costs

Mine & mill

Access road210

$0

$50

$100

NICO Site SMPP Site

Access road

Camp

Tailings storage facility

Power plant

41

NICO Site SMPP Site

Note: based on cobalt sulphate option.

Economics – Highly Leveraged to Gold

NICO demonstrates robust economics through a range of commodity prices

Economics for Cobalt Sulphate Option

$707

$951

$800

$900

$1,000

Economics for Cobalt Sulphate Option

NPV (7% discount)

NPV (5% discount)

$467

$707

$466

$660

$400

$500

$600

$700

C$M

NPV (5% discount)

$309

$147$110

$270$228

$100

$200

$300

$400

$0

Base Case Prices 3‐Yr Trailing Average Prices

Current Prices Escalated Prices Optimistic Prices

IRR 14.0% 10.5% 9.6% 17.1% 21.6%

42

Note: all values are pre‐tax.

Additional Upside

Significant opportunity existing to further strengthen project economics

Extend mine life for 3+ years with stockpiled subeconomic material

M f d ld d i i ddi i l d d i i hi h d i lMove forward gold production via additional underground mining to access high grade material

Generate additional returns from SMPP

Custom processing of concentrates sourced from other mines globally 

i i l l d d i dExpansion potential already designed 

Continue generating revenues after NICO ores depleted 

Significant commodity prices upside

Cobalt – potential for supply disruptions in the DRC and less than expected production from laterites

Gold – counter‐cyclical hedge

Bismuth – potential for decreased Chinese supply due to export quotas and increased environmental restrictions

43

Production Targeted in 2015Progressing through final stages of permitting process

Environmental Assessments well advanced for mine & SMPP permitting

For the mine & mill, public hearings begin in August, shortly after which government approval will be pending

For SMPP, an addendum to the Environmental Impact Statement will be submitted shortly for review & public comment, after which government approval will be pending

Closure of Public Registry in the DAR Review process (in Q4)

Advanced relationships with Aboriginal groups

Signed Co‐operative Relationship Agreement with Tlicho Government

Initiate Tlicho Participation Agreement (PA) Negotiations (in Q4)

Project Financing & Development Options

l d d fDeloitte is engaged to advise on project financing & development options, targeting a project level joint venture, potentially including:

Minority equity investment

44

Off‐take relationship

Commitment to arrange debt financing for construction

Production Targeted in 2015

Proposed Development Timeline

2012 2013 2014 2015 2016

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

SMPP EA

SMPP fully permitted

NICO enviro reviewNICO enviro review

NICO Minister’s approval

NICO fully permitted

FinancingFinancing

Engineering & procurement

Construction

CommissioningCommissioning 

Commercial operations

45

Summary Highlights

Positive FEED Study completed based on a vertically integrated mine, mill & refinery 

Attractive economics – highly leveraged to increased cobalt & goldAttractive economics  highly leveraged to increased cobalt & gold prices with low downside risk

Negative cash cost – cobalt cash cost (net of credits) of negativeUS$0.81/lb at Base Case prices 

High‐grade deposit of combined gold, cobalt & bismuth co‐products plus by‐product copper

Positioned to be one of the largest & lowest cost suppliers of cobalt sulphate to the rapidly expanding battery sector p p y p g y

Very advanced project with $100 million already invested, including pilot plants, test mining & permitting 

Strong management & board with experience in mine permitting, development & operations 

Targeting production in 2015

Near production, low cost mine & refinery highly leveraged to high growth strategic metals & gold.

46

Near production, low cost mine & refinery highly leveraged to high growth strategic metals & gold. 

Experienced TeamDirectors

Mahendra Naik, B Comm, CA Chairman, Director CFO Fundeco ‐ Founding director & former CFO, IAMGOLD 

George Doumet, MSc, MBA Honorary Chairman, Director Chemical Engineer – President & CEO, Federal White Cement

R bi G d MS PG P id t & CEO Di t G l i t 30 i i & l ti iRobin Goad, MSc, PGeo President & CEO, Director Geologist  ‐ 30 yrs mining & exploration experience 

David Knight, BA, LLB Secretary, Director Partner, Norton Rose specializing in securities & mining law

James Excell, BASc Director Metallurgical Engineer – 35 yrs mining experience BHP‐Billiton

William Breukelman, BASc, MBA, PEng Director Chemical Engineer – Chairman, Gedex

James Currie, BSc (Hons), PEng Director Mining Engineer – COO, Kimber Resources

The Honorable Carl L. Clouter Director Commercial pilot ‐ former owner of charter airline in NWT

Shou Wu (Grant) Chen, MSc, MBA Director Geologist – Deputy Chairman & CEO, China Mining Resources Group

Management

Julian Kemp, BBA, CA, C.Dir VP Finance & CFO Chartered Accountant – 20+ yrs mining financial experiencep, , , y g p

Thomas Rinaldi, BSc VP Operations Mining Engineer – 30 yrs engineering & operations experience

Michael De Carlo, BSc, BBA Project Manager Mining Engineer – 40+ yrs engineering & managerial experience

Bill Shepard Logistics Manager 15 yrs experience in procurement and logistics

Dr. Richard Schryer, PhD Director  Regulatory & Environmental Affairs

Aquatic Scientist –20+ yrs experience in mine permitting & environmental assessmentsEnvironmental Affairs assessments

Adam Jean, HBA, CA Controller Chartered Accountant previously with Ernst & Young

James Mucklow, MESc, PEng Manager Env.& Community Geological Engineer – 20+ yrs geological & environmental experience

Keith Lee, BSc Senior Process Engineer 25 yrs operations, engineering & mineral processing experience

Carl Kottmeier, MBA, PEng Project Manager Mining Engineer – 24 yrs engineering & operations experience

47

Joon Kim, MASc, PEng Mine Planning Engineer Mining Engineer – 10+ years operations and engineering experience

Appendix: Economics & Price Assumptions

Metal Price & 

Cobalt Metal Option Cobalt Sulphate Option

Pre‐Tax After Tax Pre‐Tax After Tax$M

$$M $M $M $M $M $M

Exchange Rate Case IRR%

$MNPV(7%)

$MNPV (5%)

IRR%

$MNPV(7%)

$MNPV(5%)

IRR%

$MNPV(7%)

$MNPV(5%)

IRR%

$MNPV(7%)

$MNPV(5%)

Base Case Prices 10.8 164.5 293.2 9.6 101.0 207.1 14.0 308.5 466.0 12.4 212.6 338.7

3‐yr Trailing 7 4 17 1 114 6 6 6 (15 3) 69 0 10 5 146 8 270 0 9 3 86 7 188 4

Average Prices7.4 17.1 114.6 6.6 (15.3) 69.0 10.5 146.8 270.0 9.3 86.7 188.4

Current Prices 7.1 2.1 99.7 6.2 (30.6) 53.4 9.6 109.5 228.2 8.5 57.6 156.8

Escalated Prices 13.9 315.2 477.8 12.3 214.9 344.7 17.1 467.1 660.1 15.2 332.4 483.7

Base Case Price assumptions are US$1,450/troy ounce (“oz”) for gold, US$20/pound (“lb”) for cobalt, US$11/lb for bismuth and US$3.50/lb for copper at an exchange rate of US$ 0.95 = C$ 1. The 3‐year Trailing Average Prices Case are as at May 31, 2012 and are US$1,359.94/oz for gold, US$18.53/lb for cobalt, US$9.83/lb for bismuth and US$3.51/lb for copper and an exchange rate of US$ 0.98 = C$ 1. The Current Price Case uses prices as at May 31, 2012 and are US$1 558 00/o for old US$15 23/lb for cobalt US$10 55/lb for bism th and US$3 40/lb for copper and an e chan e rate of US$ 0 97 C$ 1 The Escalated

Optimistic Prices 18.3 539.5 749.8 16.3 387.5 551.3 21.6 707.0 951.1 19.3 514.5 702.3

US$1,558.00/oz for gold, US$15.23/lb for cobalt, US$10.55/lb for bismuth and US$3.40/lb for copper and an exchange rate of US$ 0.97 = C$ 1.  The Escalated Price Case uses metal price assumptions of US$1,800.00/oz for gold, US$22.50/lb for cobalt, US$12.50/lb for bismuth and US$4.00/lb for copper and an exchange rate of US$ 1 = C$ 1.  For the Optimistic Price Case uses US$2,000.00/oz for gold, US$25.00/lb for cobalt, US$15.00/lb for bismuth and US$4.50/lb for copper at an exchange rate of US$ 1 = C$ 1.  Mr. Alexander Duggan, P.Eng. and Mr. Graham Peter Holmes, P.Eng. of Jacobs are the Qualified Persons for Jacobs and Mr. Eugene Puritch, P.Eng. is the Qualified Person responsible for the work by P&E under NI 43‐101.

48

Notes

49

Notes

50

For further information, please contact:

Troy Nazarewicz, Investor Relations Manager

Emerging Strategic Metal & Coal

ProducerTroy Nazarewicz, Investor Relations Manager148 Fullarton Street, Suite 1600

London, Ontario, CanadaN6A 5P3

Tel (519) 858 8188Tel. (519) 858-8188Fax. (519) 858-8155

E-mail. tnazarewicz @fortuneminerals.comWebsite. www.fortuneminerals.com

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